Middleton Hospital Scenario As Middlefield Hospital approaches the beginning of another year serving the health needs of our community, the strides we have made in replenishing the workforce with qualified staff should be applauded, but there remains work to be done. After meeting with the Chief Financial Officer (CFO) and listening to a detailed analysis of the hospital's financial performance during the last six months, it has become apparent that Middlefield must consider fundamental adjustments if our strict budgetary limitations are to be met. Having convened a meeting of Middlefield Hospitals' team of executives and managers, a total of six critical obstacles to future profitability have been brought to my attention, including the arrival of a competing medical facility in the region which is attracting patients and internal issues in terms of billing and insurance. In order to maintain a policy of proactive preventative measures designed to assure the financial viability of Middlefield Hospital, while also honoring our commitment to key stakeholders including physicians, nurses, patients, and the community at large, I have devised a four-pronged approach to resolve the most pressing issues threatening the hospital's fiscal solvency. Below you will find my advisory guidelines, based on extensive research in applicable fields, to be used for the formulation of a more effective and efficient hospital policy.

The payer mix of Middlefield Hospital is comprised of more and more Medicare, Medicaid, and uninsured patients, and fewer patients have commercial insurance. This is reducing overall reimbursement and net income...

After reviewing the data assembled by a California Healthcare Foundation study of hospitals which thrive despite poorly rated payer mixes, I recommend a reemphasis on "the importance of [our] reputation for delivering high-quality care in negotiating payment rates with commercial payers" (Rundall et al., 2010). By pushing our commercial payers to offer rates commensurate with the excellent care Middlefield Hospital has always provided, we can effectively balance the reduction in patients who carry commercial insurance. Predictive analysis of similar hospital's experiences after renegotiating rates with commercial payers indicates that Middlefield can realistically expect increases in revenue across the board which will exceed the losses currently being incurred by the reduction in commercially insured patient intake.
The nearby hospital that competes with Middlefield has opened a wellness center that offers a comprehensive array of preventative and wellness services to the community. This facility is attracting young families to seek services at this location.

While the arrival of a direct source of competition for patients is undoubtedly regrettable, Middlefield Hospital currently lacks the financial wherewithal to directly counter many of our rival's strategies. If current policy shifts produce the…